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Tariffs

Trump Threatens Apple and Other Smartphone Makers with 25% Tariff

Strategic Insights

— 1 min read

US President Donald Trump on Friday continued his pressure on Apple and other smartphone manufacturers, threatening to impose a 25% tariff on their devices unless they are built in the US. Trump initially singled out Apple, only to later expand the threat to include all smartphone makers, including Samsung and others. This move comes as Apple designs its products in the US but assembles most of its iPhones in China, where a trade war with the US remains ongoing. Trump has already urged Apple to shift production to the US, but the company has announced plans to move some production to India and other countries.

Key Takeaways:

  • Trump has threatened Apple and other smartphone manufacturers with a 25% tariff unless their devices are built in the US.
  • The tariff would take effect by the "end of June," according to Trump.
  • Apple designs its products in the US but assembles most of its iPhones in China, where a trade war with the US remains ongoing.
  • Shifting iPhone manufacturing to the US is considered unrealistic and would require a fundamental overhaul of Apple's business model, which could take years, if it's possible at all.
  • Apple has announced plans to shift some production to India and other countries to mitigate the impact of tariffs.
  • The constant pressure from the White House has taken a toll on Apple's stock price, which has fallen more than 20% since Trump took office.
  • Cook warned about the uncertain impact of threatened US tariffs on Chinese products, which could cost Apple USD900 million in the current quarter.
  • Analysts believe that threatened US tariffs on Chinese products could lead to higher prices for handsets in the US market.

Statistics:

  • About 90% of Apple's iPhone production and assembly remains based in China despite some production shifts (Wedbush Securities estimates).
  • Apple and Samsung account for about 80% of smartphone sales in the US.
  • Apple shares closed down 3.0% in New York on Friday.
  • The US and China agreed to suspend sweeping tariffs on each other's goods for 90 days, marking a temporary de-escalation in the trade war.

Sources:

  • AFP: "US President Trump takes aim at Apple over iPhone production"
  • Wedbush Securities: Research note by analyst Dan Ives
  • Hargreaves Lansdown: Statement by analyst Susannah Streeter
  • Wall Street Journal: "Apple Shares Fall After President Trump's Tariff Threat"

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